UPDATE 2-Argentina's Clarin spins off cable TV unit, shares up 6 pct

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By Hugh Bronstein

BUENOS AIRES, Aug 17 (Reuters) - Shares of Grupo Clarin, Argentina’s biggest media conglomerate, rose on Wednesday after saying it plans to spin off its Cablevision subsidiary as the group prepares for growth and greater competition in the local cable TV sector.

President Mauricio Macri is relaxing regulations to allow telephone companies such as Telecom Argentina and Telefonica to compete with companies like Clarin in the cable TV market. Macri took office in December, promising to attract foreign investment by lifting government controls.

The creation of Cablevision Holding SA, announced late on Tuesday, is subject to approval by Clarin shareholders at a special meeting set for Sept. 28, Clarin said in a statement.

Its shares shot up 6.21 percent to 154 pesos ($10.48) per share.

“Cablevision Holding will further benefit from being a stand-alone public company in the attractive telecommunications, cable television and internet sector where we see a significant growth opportunity and opportunities for investments,” the statement said.

Macri has ditched the trade and currency controls favored by previous President Cristina Fernandez. But, with the economy in recession, the wave of foreign investment he promised for the second half of this year has been slow to arrive.

“Argentine communications companies are already increasing their investments,” said Christian Reos, head of research at local brokerage Allaria Ledesma. “Companies that do not yet have operations in Argentina are still doing their due diligence, to see how the rules of the game are changing.”

Reos said long-term foreign investors are waiting for the economy to improve and signs that Macri can provide a stable regulatory framework. Legislative elections in October 2017 will be a key indicator of Macri’s ability to lock in his reforms.

Argentine gross domestic product is expected to shrink 1.5 percent in full-year 2016 and grow by 3.2 percent in 2017, according to a central bank poll of analysts.

Macri has predicted the economy will grow by about 3.5 percent next year. His government has not issued a GDP forecast for 2016. (Reporting by Hugh Bronstein; Editing by Jeffrey Benkoe and Phil Berlowitz)